Ethics and the future of business
Content
Ethics and the future of business....................................................................1
Week 1 – Morals & Ethics................................................................................................ 2
Session 1 Moral & Ethics................................................................................................. 4
Week 1 – Behaviors & Actions......................................................................................... 7
Lecture 2 – Behaviours & Actions..................................................................................12
Week 2 – Strategies & Stakeholders.............................................................................15
Lecture 3 Strategies & Stakeholders.............................................................................21
Week 2 - Challenges & Solutions..................................................................................24
Lecture 4 – Challenges & Solutions...............................................................................28
,Week 1 – Morals & Ethics
Evaluating Business Ethics – Normatice Ethical Theories (Crane, 2019)
- Normative ethical theories: ethical theories that aim to prescribe the morally correct way of acting,
how we ought to behave, all rational beings would adhere to those theories, i.e. rules, guidelines,
principles
- Descriptive morality: ethical theories that are adopted by a particular group or society, i.e. religion
- Ethical absolutism: claims there are eternal, universally applicable moral principles right and
wrong are objective qualities that can be rationally determined (most Western modernist)
- Ethical relativism: claims that morality is context-dependent and subjective (contemporary ethical
theories)
- Ethical pluralism: incompatible values can be equally legitimate, it neither puts all ethical
perspectives on an equal footing, nor favours one approach over the others
- Religious view on business looks like normative ethical theory: both focused on ensuring that the
business is responsible, avoids doing harm, and contribute to societal benefits, but also difference
in religion the critical requisite for acting ethically is faith, in NET its rationality & in religion there is
a heaven which has consequences on ethical decisions, in NET there is not
- Religion has its effects on businesses and their ethical decisions
- Western modernist ethical theories: start with an assumption about nature of the world and human
beings, the outcome depends on the degree to which we share the underlying assumptions, two kinds;
Consequentialist theories: judge actions by outcomes
o Ethical egoism: right if it serves self-interest, all decision-makers decide freely to
pursue their short- or long-term desires
For example, Thomas Hobbes and Ayn Rand
Criticized for overlooking selfishness and harm to others
o Utilitarianism: right if it produces the greatest good for the greatest amount of
people, “the greatest happiness principle”, focus on collective welfare
For example, Jeremy Bentham & John Stuart Mill
In business similar to cost-benefit analysis (pain-pleasure)
Challenges: subjectivity, equal weighting, quantification, distribution of utility
(short vs. long-term impacts)
Act utilitarianism (looks at single action) vs rule utilitarianism (principles,
long-term)
Principle based theories: judge actions by duties and rights
o Ethics of duty: morality is about acting from duty, based on a priori rational
principles motivation matters, choices driven by sentiment are immoral
Kantianism (Immanuel Kant)
Categorical imperative: act only according to rules or principles that you want
that everybody else follows at the same time
Challenges: undervalues motivation and outcomes, assumes full rationality
o Ethics of rights and justice (rights & duties flipside same coin)
Human rights: basic unconditional entitlements that are inherent to all human
beings, without exception (freedom, work) businesses are expected to
respect them
Justice: how fairly individuals are treated so that they get what they deserve,
two aspects;
Procedural justice: fair processes
, Distributive justice: fair outcomes based on need/merit
- Utility: measurement for ethics, greater utility means greater morality
- Justice use fairness, able to measure with; fair procedures: fairness is determined on whether
everyone has been free to acquire rewards for their efforts & fair outcomes: fairness is determined
according to whether the consequences are distributed in a just manner, according to some underlying
principle such as need or merit would want to achieve both types of fairness to be justice
- Social contract theory: an agreement between members of a society and those who govern it
- John Rawls came with A theory of justice: veil of ignorance (people don’t know their role in
society), society is just when;
1. Each person has an equal right to the most extensive total system of basic liberties compatible
with a similar system of liberty for all
2. Social and economic inequalities are arranged so that they are both to the greatest benefit of
the least advantaged (difference principle when an CEO gets more salary, people at bottom
of company should also get more) & attached to offices and positions open to all under
condition of fair equality (principle of equal opportunity everyone has fair chance to be
CEO)
Limits of western modernist theories
- They have the disadvantage that their view of the world only presents one aspect of human life, while
reality normally tends to be more complex
- Main criticism on these theories compared to business:
Too abstract: managers are unlikely to apply abstract principles derived from long-dead
philosophers when dealing with concrete problems of business
Too narrow: each theory is focused on one aspect of morality why choose consequences,
duties, justice or rights when all are important?
Too objective and elitist: no subjective look on the situation, so how do those philosophers
know whether a product manager in Thailand is doing the right thing?
Too impersonal: personal bonds and relationships that shape our thoughts and feelings are left
out
Too rational and codified: we need better moral imagination and not moral reasoning
Too imperialist: why assume that ethical theories from the West are suitable for businesses
everywhere in the world?
Alternative perspectives on ethical theory
- Not so much used in business ethics, but give a totally different view, four types;
Ethical approaches based on character and integrity (virtue ethics): look at integrity of the
decision-maker, a virtuous person is a morally good and wise person intellectual virtues
(wisdom) & moral virtues (all kinds of characteristics such as honesty)
Ethical approaches based on relationships and responsibility (ethics of care): focus on
relationships instead of character, feminist ethics, difference in gender and ethics we have a
willingness to act on behalf of those we have a relationship with; we are not autonomous; we
are bound by circumstance, relations and position; we have restricted information and choices;
we are in positions of unequal power
Ethical approaches arrived at through a deliberative process (discourse ethics): process of
norm generation including rational reflection and open communication on the real-life
experience of all relevant participants
Content
Ethics and the future of business....................................................................1
Week 1 – Morals & Ethics................................................................................................ 2
Session 1 Moral & Ethics................................................................................................. 4
Week 1 – Behaviors & Actions......................................................................................... 7
Lecture 2 – Behaviours & Actions..................................................................................12
Week 2 – Strategies & Stakeholders.............................................................................15
Lecture 3 Strategies & Stakeholders.............................................................................21
Week 2 - Challenges & Solutions..................................................................................24
Lecture 4 – Challenges & Solutions...............................................................................28
,Week 1 – Morals & Ethics
Evaluating Business Ethics – Normatice Ethical Theories (Crane, 2019)
- Normative ethical theories: ethical theories that aim to prescribe the morally correct way of acting,
how we ought to behave, all rational beings would adhere to those theories, i.e. rules, guidelines,
principles
- Descriptive morality: ethical theories that are adopted by a particular group or society, i.e. religion
- Ethical absolutism: claims there are eternal, universally applicable moral principles right and
wrong are objective qualities that can be rationally determined (most Western modernist)
- Ethical relativism: claims that morality is context-dependent and subjective (contemporary ethical
theories)
- Ethical pluralism: incompatible values can be equally legitimate, it neither puts all ethical
perspectives on an equal footing, nor favours one approach over the others
- Religious view on business looks like normative ethical theory: both focused on ensuring that the
business is responsible, avoids doing harm, and contribute to societal benefits, but also difference
in religion the critical requisite for acting ethically is faith, in NET its rationality & in religion there is
a heaven which has consequences on ethical decisions, in NET there is not
- Religion has its effects on businesses and their ethical decisions
- Western modernist ethical theories: start with an assumption about nature of the world and human
beings, the outcome depends on the degree to which we share the underlying assumptions, two kinds;
Consequentialist theories: judge actions by outcomes
o Ethical egoism: right if it serves self-interest, all decision-makers decide freely to
pursue their short- or long-term desires
For example, Thomas Hobbes and Ayn Rand
Criticized for overlooking selfishness and harm to others
o Utilitarianism: right if it produces the greatest good for the greatest amount of
people, “the greatest happiness principle”, focus on collective welfare
For example, Jeremy Bentham & John Stuart Mill
In business similar to cost-benefit analysis (pain-pleasure)
Challenges: subjectivity, equal weighting, quantification, distribution of utility
(short vs. long-term impacts)
Act utilitarianism (looks at single action) vs rule utilitarianism (principles,
long-term)
Principle based theories: judge actions by duties and rights
o Ethics of duty: morality is about acting from duty, based on a priori rational
principles motivation matters, choices driven by sentiment are immoral
Kantianism (Immanuel Kant)
Categorical imperative: act only according to rules or principles that you want
that everybody else follows at the same time
Challenges: undervalues motivation and outcomes, assumes full rationality
o Ethics of rights and justice (rights & duties flipside same coin)
Human rights: basic unconditional entitlements that are inherent to all human
beings, without exception (freedom, work) businesses are expected to
respect them
Justice: how fairly individuals are treated so that they get what they deserve,
two aspects;
Procedural justice: fair processes
, Distributive justice: fair outcomes based on need/merit
- Utility: measurement for ethics, greater utility means greater morality
- Justice use fairness, able to measure with; fair procedures: fairness is determined on whether
everyone has been free to acquire rewards for their efforts & fair outcomes: fairness is determined
according to whether the consequences are distributed in a just manner, according to some underlying
principle such as need or merit would want to achieve both types of fairness to be justice
- Social contract theory: an agreement between members of a society and those who govern it
- John Rawls came with A theory of justice: veil of ignorance (people don’t know their role in
society), society is just when;
1. Each person has an equal right to the most extensive total system of basic liberties compatible
with a similar system of liberty for all
2. Social and economic inequalities are arranged so that they are both to the greatest benefit of
the least advantaged (difference principle when an CEO gets more salary, people at bottom
of company should also get more) & attached to offices and positions open to all under
condition of fair equality (principle of equal opportunity everyone has fair chance to be
CEO)
Limits of western modernist theories
- They have the disadvantage that their view of the world only presents one aspect of human life, while
reality normally tends to be more complex
- Main criticism on these theories compared to business:
Too abstract: managers are unlikely to apply abstract principles derived from long-dead
philosophers when dealing with concrete problems of business
Too narrow: each theory is focused on one aspect of morality why choose consequences,
duties, justice or rights when all are important?
Too objective and elitist: no subjective look on the situation, so how do those philosophers
know whether a product manager in Thailand is doing the right thing?
Too impersonal: personal bonds and relationships that shape our thoughts and feelings are left
out
Too rational and codified: we need better moral imagination and not moral reasoning
Too imperialist: why assume that ethical theories from the West are suitable for businesses
everywhere in the world?
Alternative perspectives on ethical theory
- Not so much used in business ethics, but give a totally different view, four types;
Ethical approaches based on character and integrity (virtue ethics): look at integrity of the
decision-maker, a virtuous person is a morally good and wise person intellectual virtues
(wisdom) & moral virtues (all kinds of characteristics such as honesty)
Ethical approaches based on relationships and responsibility (ethics of care): focus on
relationships instead of character, feminist ethics, difference in gender and ethics we have a
willingness to act on behalf of those we have a relationship with; we are not autonomous; we
are bound by circumstance, relations and position; we have restricted information and choices;
we are in positions of unequal power
Ethical approaches arrived at through a deliberative process (discourse ethics): process of
norm generation including rational reflection and open communication on the real-life
experience of all relevant participants
